S&P lifts Kazakhstan from junk

Standard & Poor's said it raised its long-term foreign currency ratings on the Republic of Kazakhstan to BBB- from BB+ and its local currency ratings to BBB/A-3 from BBB-/A-3.

The upgrade reflects the sustained strengthening of the republic's economic prospects, as well as prudent policies keeping the government's deficit and debt at low levels. Kazakhstan is the ninth sovereign currently rated by S&P that made the transition to investment grade from speculative grade.

At the same time, the B short-term foreign currency rating on Kazakhstan was upgraded to A-3 from B.

The outlook is stable.

"Public sector net external assets are expected to reach about 48.6% of current account receipts in 2004, on the back of continued economic growth and the resource-based tax revenues that follow," said S&P credit analyst Luc Marchand. "Moreover, fiscal prudence is underpinned by the accumulation of oil and tax windfalls in a National Fund, which will smooth the impact of oil price volatility."

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